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Thursday, September 07, 2006

IPO Alert: New Oriental Education Prices Higher

Now that is a fast IPO. New Oriental Education (EDU-NYSE), a TOEFL test prep company in China priced above its estimated range. It priced 7.5 million shares of its ADR's at $15.00, which is above the $11.00 to $13.00 range. What is funny is that the filing was just done about two weeks ago.

You could basically compare this to a Princeton Review or Kaplan in the US, and New Oriental is probably part of the reason they are scoring so high on tests. Here is what we said on this before:

New Oriental Education & Technology Group Inc. filed to come public on the NYSE under the ticker "EDU." It plans to price 7.5 million ADR's at between $11 and $13 per share, with each ADR representing four common shares. New Oriental hired Credit Suisse and Goldman Sachs as underwriters. New Oriental is a Beijing-based provider of private educational services in China as a test prep school and English prep. New Oriental is a huge name in China and is said to partially be the reason so many students had high verbal GRE and TOEFL scores. This is actually considered a hot name in IPO-watchers out of China, although it is not thought of as "the next Baidu" type of IPO.

If you want to compare this to anything, the most comparable company would be a Princeton Review (REVU) here in the US, or even Kaplan (owned by the Washington Post). Princeton Review is the SAT and prep-test leader in the US, or at least was, and certainly helped YOURS TRULY (ME) improve SAT scores to weasel into college. REVU unfortunately hasn't done too well as a public company. REVU has only a $144 million market cap, trades under its old IPO price, and has been a dead-money stock trading between $5 and just over $6 for most of the last 18 months. It has also posted net losses for the last two years and is "hopefully" at the end of a long fight to get back to annual profits. We will follow up with New Oriental's financials in a later story for a full comparison.